On 24 October 2000, the Committee of European Union Shipbuilders Associations ("CESA") lodged a complaint pursuant to Articles 3 and 4 of Council Regulation 3286/94² (the Trade Barriers "TBR" Regulation) in order to eliminate certain alleged Korean trade practices which adversely affect Community sales of commercial vessels. The complaint concerned adverse trade effects and injury suffered by Community shipbuilders resulting from subsidies granted to, or otherwise benefiting, Korean shipbuilding companies by the Republic of Korea in violation of Articles 3 and 5 of the WTO Agreement on Subsidies and Countervailing Measures ("ASCM"). The Commission after consulting with the Member States in the framework of the TBR Committee initiated the investigation on 2 December 2000³.

　

During the first stage of the examination, the Commission services gathered information on the Korean legislation and contested practices, on the product subject to investigation, on the Korean and Community industries and on injury and the adverse trade effects claimed by the complainant. This information has been collected by means of different questionnaires addressed to:

　

- Community producers and their association (CESA);

- Korean authorities;

- Korean producers;

- Korean financial institutions;

- Other third parties (shipbrokers).

　

Moreover, verification visits took place in the European Community (February 2001) and Korea (March 2001). During the visit to Korea the Commission had the opportunity to meet the relevant Korean authorities, financial institutions and Korean producers of the product subject to the investigation.

　

The following governmental authorities were visited:

　

- Ministry of Foreign Affairs & Trade

- Ministry of Finance and Economy (including taxation agency)

- Financial Supervisory Commission (FSC)

- Korean Asset Management Corporation (KAMCO)

- Korean Export-Import Bank (KEXIM)

　

The following financial institutions co-operated with the investigation; three of them (marked with asterisk) were visited:

　

- Korean Development Bank^*

- Cho Hung Bank^*

- Korean First Bank^*

- Korean Exchange Bank

- Hanvit bank

- Pusan bank

- Hanareum banking Corporation

- Shinhan Bank

　

The following shipyards co-operated with the investigation; all were visited:

　

- Samho Heavy Industries (previously called Halla Engineering and Heavy Industries)

- Daewoo Shipbuilding & Marine Engineering

- Hyundai Heavy Industries

- Hyundai Mipo

- Samsung Heavy Industries

- Hanjin Heavy Industries & Construction Co

　

The Commission addressed questionnaires to 46 shipbuilding companies in the Community. The following 21 companies replied to the questionnaire and are therefore regarded as co-operating Community producers. Eight of these shipyards (marked with an asterisk) have been visited by Commission officials.

　

　

The Commission organised (separate) hearings following requests from the Korean Shipbuilders Association, four shipbrokers and one shipowner.

　

The complaint is lodged by CESA, on behalf of the European Community ("EC") shipbulding industry and EC shipbuilding enterprises. CESA is an association of Community enterprises pursuant to Articles 3 and 4 of the Regulation. CESA consists of national shipbuilders and ship repairers associations with registered offices and principal places of business throughout the EC. No significant production of ships takes place in companies not associated with CESA. CESA thus, represents the major proportion of total commercial shipbuilding and ship repairing in the EC.

　

The affected products are commercial vessels for international commerce, including, more specifically:

　

- bulk carriers

- container ships

- oil tankers

- product and chemical tankers

- passenger and RO/RO ferries

- liquefied gas carriers

- other cargo vessels

- other non-cargo vessels (including offshore units)

- cruise ships